Rush Street Interactive (RSI) Q2 2025: Latin America MAUs Surge 42%, Fueling Record Profit Flow-Through

July 30, 2025 | By EarningsIQ Research

Rush Street Interactive’s Q2 saw broad-based growth, with Latin America and North American iCasino markets driving all-time highs in revenue, profit flow-through, and player engagement. Management raised full-year guidance despite tax headwinds, signaling confidence in both core market resilience and emerging international scale. With marketing efficiency at a record low and new product launches underway, RSI’s platform differentiation and geographic diversity position it for continued outperformance as regulatory and tax dynamics evolve.

Summary

  • Latin America Expansion Accelerates: MAUs up 42% YoY, with Mexico revenue more than doubling.
  • Marketing Leverage at All-Time Low: Customer acquisition costs fell as new depositors hit record levels.
  • Guidance Raised Despite Tax Drag: Management’s confidence signals sustained momentum into H2.

Performance Analysis

RSI delivered its ninth consecutive quarter of revenue and adjusted EBITDA growth, with total revenue up 22% YoY and adjusted EBITDA up 88% YoY. This acceleration was achieved despite persistent headwinds from temporary VAT taxes in Colombia and higher state tax rates in the U.S., underscoring the company’s operational resilience and effective cost management. Notably, gross margin improved by 80 basis points YoY, reflecting a favorable revenue mix shift toward higher margin iCasino markets and disciplined cost control.

Segment performance was broad-based: online casino revenue rose 25% YoY, while online sports betting increased 15% YoY. In North America, iCasino market MAUs climbed over 30%, and even excluding Delaware, growth in other iCasino states reached the high 20% range—marking the strongest expansion since 2022. Latin America posted standout gains, with MAUs up 42% YoY and Mexico revenue up 125% YoY. Colombia’s GGR, gross gaming revenue, surged over 70% YoY, though net revenue was flat due to aggressive bonusing amid the VAT tax. Ontario, Canada’s largest province, delivered its fastest growth since 2023 at 25% YoY.

  • Marketing Efficiency Hit Record Levels: Marketing spend fell below 14% of revenue, the lowest since going public, yet first-time depositors reached a new high.
  • Cash Flow Strengthened: RSI ended the quarter with $241 million in cash, debt-free, and generated $41 million in year-to-date cash.
  • Share Repurchases Remain Opportunistic: $2.5 million in buybacks were executed in Q2, with $42 million still authorized.

Profitability gains were not solely a function of revenue growth—the company’s ability to convert top-line momentum into record EBITDA margins and cash generation reflects a scalable, high-ROIC business model. Management’s raised guidance incorporates full impact from known tax headwinds, demonstrating conviction in the durability of the current growth trajectory.

Executive Commentary

"This marks our ninth consecutive quarter of improving both revenue and adjusted EBITDA for the preceding quarter, underscoring the consistency and strength of our business model. Notably, adjusted EBITDA grew 88% year over year driven by strong performance across our business, growing revenue 22% versus a year ago."

Richard Schwartz, Chief Executive Officer

"Our marketing efficiency continues to be a highlight of our performance. Marketing spend for the quarter was 36.2 million, representing less than 14% of revenue. Our lowest mark since going public. This is particularly remarkable given that we achieved our largest quarter in history for first time depositing customers despite having not launched any new North American markets since the end of 2023."

Kyle Sowers, Chief Financial Officer

Strategic Positioning

1. Diversification Across Geographies and Products

RSI’s balanced exposure to North American iCasino, U.S. sports betting, and Latin American gaming is a core differentiator. The company’s focus on iCasino-first markets, where player values and margins are structurally higher, is translating into superior growth and profitability. In Latin America, Colombia and Mexico are scaling rapidly, with Mexico now outpacing Colombia’s early trajectory. This geographic diversification helps offset regulatory and tax volatility in any single market.

2. Product Innovation and Cross-Sell

RSI’s launch of multi-state online poker with shared liquidity demonstrates agility in product development and cross-vertical engagement. The company’s proprietary platform enables seamless cross-play between poker, casino, and sportsbook, supporting higher player retention and wallet share. Exclusive content and differentiated live dealer experiences further reinforce RSI’s brand positioning among high-value casino players.

3. Operating Leverage and Marketing Discipline

Marketing spend as a percentage of revenue declined to an all-time low, even as new customer acquisition set records. RSI’s disciplined investment in player quality—prioritizing high-LTV, lifetime value, customers over raw volume—has allowed for margin expansion without sacrificing growth. General and administrative expenses rose just 1% YoY, reflecting ongoing cost discipline and scale benefits.

4. Capital Allocation Flexibility

Management is maintaining a balanced approach to capital deployment, retaining ample cash for upcoming iCasino market launches while remaining opportunistic with share repurchases. The ability to rapidly invest in new markets, especially iCasino-led openings, is prioritized over consistent buyback pacing, reinforcing a focus on long-term value creation.

5. Regulatory and Tax Adaptation

RSI’s proactive response to evolving tax regimes—including absorbing Colombia’s VAT tax and adjusting minimum bet sizes in Illinois—demonstrates operational nimbleness. The company is leveraging its proprietary technology to optimize bonusing and payment methods, mitigating the impact of external headwinds while maintaining customer experience and market share.

Key Considerations

RSI’s Q2 highlights the payoff from its iCasino-centric, international growth strategy, but also surfaces several critical levers and watchpoints for investors as the year progresses.

Key Considerations:

  • LatAm Scale Potential: Mexico’s population and early revenue outperformance position it as a future anchor market, with upside if it tracks Colombia’s growth curve.
  • Colombia VAT Tax Duration: Guidance assumes the tax remains through year-end, but early repeal or non-extension could drive a step-change in revenue and margin in 2026.
  • Marketing Spend Re-Acceleration: Management flagged plans to incrementally increase marketing in Q3 and Q4, betting on efficient customer acquisition ahead of NFL seasonality and new market launches.
  • Margin Structure: Ongoing gross margin improvement is expected as higher-margin iCasino markets gain share and vendor costs are renegotiated at scale.
  • Competitive Response in Columbia: All major operators are absorbing the VAT tax, but RSI’s proprietary platform and custom payment methods are supporting player growth and engagement.

Risks

RSI faces near-term risk from regulatory and tax volatility, particularly in Colombia where the VAT tax could be extended or modified. North American state-level tax hikes and potential changes in market access fees may pressure margins. While RSI’s geographic and product diversity offers resilience, intensifying competition, especially from sports-first brands in live dealer and table games, could slow share gains if product innovation lags. Management’s guidance embeds conservative assumptions, but external shocks remain a watchpoint.

Forward Outlook

For Q3 2025, RSI guided to:

  • Incremental marketing spend increases, particularly in casino-led markets
  • Continued gross margin improvement as higher-margin markets scale

For full-year 2025, management raised guidance:

  • Revenue: $1.05 billion to $1.1 billion (midpoint up 16% YoY)
  • Adjusted EBITDA: $133 million to $147 million (midpoint up 51% YoY)

Management highlighted several factors that underpin the guidance:

  • Guidance includes full impact from U.S. and Colombian tax headwinds, assuming Colombia VAT persists through year-end
  • Only live markets as of today are included—potential for upside if new iCasino markets open earlier than expected

Takeaways

RSI’s Q2 performance underscores the strategic value of its iCasino-led, international growth platform, with broad-based momentum and margin expansion achieved even amid temporary regulatory headwinds.

  • Profit Flow-Through Surged: Record EBITDA conversion and cash flow reflect operational leverage and high-value customer focus.
  • LatAm and iCasino Markets Are Key Engines: Mexico and Colombia are scaling rapidly, while North American iCasino states continue to outperform, supporting guidance raises even with tax drag.
  • 2026 Setup Hinges on Regulatory Outcomes: Colombia VAT expiration and new market launches could unlock further upside, while marketing discipline and product innovation remain critical to sustaining share gains.

Conclusion

Rush Street Interactive’s Q2 results validate its strategy of focusing on high-margin iCasino markets and international expansion, with record profitability and player growth achieved despite regulatory headwinds. Management’s raised guidance and capital allocation discipline suggest confidence in sustained momentum and resilience, positioning RSI as a leading operator in the global online gaming landscape.

Industry Read-Through

RSI’s results reinforce the structural advantage of iCasino markets over sports-only models, with higher margins, stickier customer cohorts, and greater resilience to tax and regulatory shocks. Latin America’s rapid digital gaming adoption, especially in Mexico, signals a multi-year addressable market expansion for operators with local expertise and proprietary platforms. The company’s marketing efficiency and product innovation set a new bar for customer acquisition and retention, while its experience navigating tax volatility in Colombia offers a playbook for peers facing similar pressures in emerging markets. As U.S. regulatory focus intensifies on tax revenue and market access, RSI’s geographic and product diversification provides a blueprint for sustainable growth and risk mitigation across the sector.

RSI Consumer Discretionary Online Gaming iCasino Latin America Marketing Efficiency Tax Product Innovation